GDP growth may hit 8% in 2005: Djisman
GDP growth may hit 8% in 2005: Djisman
Johannes Simbolon, The Jakarta Post, Jakarta
After years of an economy in crisis and slow growth, Indonesia
is poised to record an accelerated growth rate starting in 2005,
according to a local economist on Tuesday.
The strong rebound will come on the back of global recovery
and regained confidence in the government after the completion of
general elections in 2004, Djisman S. Simandjuntak, executive
director of Prasetiya Mulya Business School, said.
"No matter who wins the presidential election, Indonesia will
be heading for a strong economic rebound," Djisman said in a
presentation at The Jakarta Post.
With a steady decline of investment and the domestic
consumption being the main factor behind the slow economic growth
over the past several years, Indonesia has reached the bottom of
the economic slump, so has likely seen the worst of it.
"Nothing is worse than our situation now," he said.
Once the general elections are over and Indonesia has its
president, gone will be many of the worries over political
uncertainties which have thus far made many businessmen and
investors reluctant to bring most of their funds into the
country.
Capital owners who took their funds out of Indonesia in the
aftermath of the economic crisis have started bringing back their
money back to Indonesia, which is among others reflected in the
increasing number of shopping center projects across Jakarta,
Djisman said. However, they are still reluctant to bring back
much of the funds on worries over general elections next year.
Djisman said not only the previous investors will come back
Indonesia, but also new investors, who are attracted to the huge
market potential of the nation.
"We deserve higher foreign investment," he said.
Djisman is optimistic that the 2004 elections would go
smoothly and the current President, Megawati Soekarnoputri would
face no serious challenges in her bid to be reelected. If
reelected, Megawati will have no other option but to improve the
corrupt government.
"The quality of the government is going to improve, because
nothing is worse than the current situation," Djisman explained.
The bright outlook on the political scene coupled with global
recovery is likely to enable Indonesia to reach a high economic
growth of 8 percent in the years starting from 2005 as the
country did during the "positive shock of the economy" in the
period of from the late 1960s to early 1970s.
After this new "positive shock period", the economic growth
will be stay at a high rate of around 7 percent.
Several international agencies have predicted that after the
general elections, Indonesia will record a brisker economic
growth along with the global recovery.
The Organization for Economic Cooperation and Development
(OECD) in its latest Economic Outlook released late last month
declared that the global slump had been over and the global
economy was heading for strong growth in the coming years. It
predicted growth should pick up to near five percent by 2005 in
the wider Asian region comprising China, Indonesia, Thailand,
Singapore and the Philippines.
Earlier, the World Bank predicted the Indonesian economy to
grow by 4 percent next year. After the general elections, the
growth will get progressively stronger at 4.5 percent in 2005 and
5 percent in 2006.